Operational Management: Responsibilities And Differences Between Manufacturing And Service Organizations

Intangibility of Output in Manufacturing and Service Organizations

The business administration which is responsible for all the operations of the business including manufacturing process, services and many others operations is called operational management. Operational management has many responsibilities for the business such as productivity, supply chain, quality and capacity. Operational management manages all the processes of production and distribution of products as well as services and many others relative services such as storage, quality control, inventory control and purchasing. The main focus of operational management in an organisation is to improve efficiency as well as the effectiveness of organisation. The operations of management vary according to the type of organisation such as retailing, wholesale and manufacturing.

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Physical Goods

There is difference intangibility of output in manufacturing and service providing organisation. As stated by Hill (2017), the output of a service organisation is not tangible or intangible. In case of manufacturing organisations, they have to produce goods so that customers and feel and touch the goods.

Inventory Levels

Inventory is the cost of an organisation that it has to put in the business. As stated by Albliwi, Antony, Abdul Halim Lim & van der Wiele (2014), manufacturing organisations have to manufacture products with inventory according to the demand in market but service organisations do not require inventory as they provide the services according to the requirement of customers.

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Customer Demands

Manufacturing organisations have to produce products earlier before the requirement of the customers but the service organisations do not have to produce a service unless it is required. As stated by Wuenderlich et al. (2015), sometimes there is loss of products and money in manufacturing organisation due to fewer requirements of particular products that have been already produced by the organisation in large amount.

Labour Requirement

There is difference in requirement of labour in manufacturing and service organisations. In accordance to Hitomi (2017), service organisations require labours with specific skill and knowledge but manufacturing organisations require labours in large amount irrespective of their skills.

Physical Location

There is no particular requirement of location for service organisations. It can provide service from anywhere. There is some requirement of location in case of manufacturing organisation based on operations.


The quality of the service is first competitive priority for service organisations. As stated by Jacobs & Chase (2017), the quality of service should be according to the need and expectation of customers. Abu Dhabi National Hotel of United Arab Emirates provides the best quality of service to the customers.

Inventory in Manufacturing and Service Organizations


The service organisations have the ability to manage the production cost effectively and it should also include the cost of adding value, inventory and overhead. Abu Dhabi Hotel is affordable as it is a national hotel of United Arab Emirates.


Delivery is the priorities based on time. It is the main service that should be provided to the customers in order to make the service effective. The delivery service of Abu Dhabi hotel is well and the delivery is mostly provided to the customers within time.


As stated by Wuenderlich et al. (2015), service organisations should be flexible according to the requirement in markets such as variety, design and many others. Abu Dhabi hotels change their services according to the requirement and with time also.

Customer Focus

Service organisations should focus on the needs of the customers including customisation of products, customer information and dependable promise. Abu Dhabi hotel keeps informing their customers about the offers and changes to update them.

Role of Manager

It is the role of the manager to focus on the competitive priorities to stay in the competitive world. The management should think about the quality of service and its affordability for the customers. As stated by Albliwi, Antony, Abdul Halim Lim & van der Wiele (2014), management should research the market to change the structure of organisation according to the needs of the customers. Time should be focused mainly in case of providing services to the customers because if customers get the services on time, they become happy with the organisations.

Executive opinion

In this technique of qualitative forecasting, the opinions of some finance team, administration and experts are taken in order to increase the future sale or services of the organisation. As stated by Garza-Reyes (2015), trend extrapolation is a quantitative technique that has been used here. This forecasting is applied quickly for the benefit of organisation. Abu Dhabi hotel also takes the opinion in order to increase future sale and services.

Delphi Method

In this technique, a panel discussion is done with experts and they are questioned one by one for the future events. For forecasting of long range, this technique is very helpful. With the help of questionnaire format, this technique is applied.

Sales Force Polling

Many organisations use salespeople for forecast sale because they have direct contacts with the customers. In accordance to Hitt, Xu & Carnes (2016), organisations think that the future market of the business will increase because of the closeness of salespeople with customers.

Labor in Manufacturing and Service Organizations

Consumer Surveys

In this forecasting technique, surveys have been done by the organisations in order to understand the customers’ needs. Abu Dhabi hotel also uses this technique in order to understand what customers really want in the hotel.

As stated by Smith, Maull, & Ng (2014), senior managers have to identify the requirement of organisations in order to provide the best services to the customers. In Abu Dhabi, if the existing customers are not coming regularly then it should think of using customer survey forecasting technique in order to understand the customers’ needs. As stated by Wuenderlich et al. (2015), if the rate of growth of business is not well then it should use the expert opinion forecasting technique to take some experts’ opinion. Abu Dhabi is using this technique because the customers are very happy and it has been found that most of the business of the hotel is based on the regular customers. The hotel also does some changing according to the experts’ opinion and panel discussion is also done once in six months to take advice from the experts.

Price and Quality

Before purchasing the goods from the suppliers, organisations have to focus on the price and quality of goods. As stated by Wuenderlich et al. (2015), the price should be also affordable so that organisation can make a deal with the supplier for future services. In Abu Dhabi hotel, the manager researches various suppliers then decide that which supplier is going to provide best goods at lower price.


Before deciding the supplier of an organisation, it is also focussed that whether the suppliers are able to provide good services such as emergency services. In accordance to Snyder, Witell, Gustafsson, Fombelle & Kristensson (2016), if the suppliers are well to provide the services according to the requirement of the organisations then the purchasing is done from the suppliers. The managers of Abu Dhabi also focus on the services before purchasing from the suppliers.


In case of emergency, the suppliers should be ready to provide goods and services timely so that the organisation can fulfil the needs of the organisation. As stated by Tan (2018), in case of special requirements of foods or any other things in Abu Dhabi hotel, the suppliers should be ready to provide the requirements on time.

Customer Feedback

According to the feedback of customers, the managers of an organisation decide that they need to improve their planning process to meet the needs and expectation of the customers. Hitt, Xu & Carnes (2016) stated that if the customers are not satisfied with the services then the management of the organisation needs to implement some new strategy and focus on this. In case of Abu Dhabi hotels, if customers are not giving positive feedback then the managers of the hotel should change some planning in order to satisfy the customers.

Location in Manufacturing and Service Organizations

Loss of business

As stated by Wuenderlich et al. (2015), if the business of the organisation is facing loss then the managers of the organisation should think to improve the planning in order to grow the business and stay in the market for long time. Abu Dhabi hotel was facing some loss few years back but it has applied some forecasting technique such as customers’ surveys and panel discussion and now the business has been improved.


This project is based on major roles of management in an organisation. It is basically the roles of managers to think about the productivity, capability, quality and service of the organisation. The management also needs to think about the strategy of the business and need to improve it with time and according to needs as well as expectations of customers. The management of the organisation focuses on the competitive priorities such as quality, flexibility and services to stay in the market for long time. Some forecasting techniques are also applied by the management in order to understand the needs of the market.



Hill, T. 2017., Manufacturing strategy: the strategic management of the manufacturing function. London: Macmillan International Higher Education. Retrieved from: https://books.google.co.in/books?hl=en&lr=&id=SjpdDwAAQBAJ&oi=fnd&pg=PR13&dq=OPERATION+MANAGEMENT+book&ots=Cdv1ZCq1Ch&sig=iLJfvt5A2dhIf-kRjBBHeB8B9gs#v=onepage&q&f=false

Hitomi, K. 2017., Manufacturing Systems Engineering: A Unified Approach to Manufacturing Technology, Production Management and Industrial Economics. Abingdon: Routledge. Retrieved from: https://www.taylorfrancis.com/books/9781351433730

Jacobs, F. R., & Chase, R. B. 2017. Operation and supply chain management. New York: Mc GrawHill. Retrieved from: https://thuvienso.vanlanguni.edu.vn/handle/VanLang_45/1850


Albliwi, S., Antony, J., Abdul Halim Lim, S., & van der Wiele, T. 2014,. Critical failure factors of Lean Six Sigma: a systematic literature review. International Journal of Quality & Reliability Management, 31(9), 1012-1030. Retrieved from: https://www.emeraldinsight.com/doi/abs/10.1108/IJQRM-09-2013-0147

Garza-Reyes, J. A. 2015,. Lean and green–a systematic review of the state of the art literature. Journal of Cleaner Production, 102, 18-29. Retrieved from: https://www.sciencedirect.com/science/article/pii/S0959652615004394

Hitt, M. A., Xu, K., & Carnes, C. M. 2016., Resource based theory in operations management research. Journal of Operations Management, 41, 77-94. Retrieved from: https://www.sciencedirect.com/science/article/abs/pii/S0272696315000972

Smith, L., Maull, R., & CL Ng, I. 2014,. Servitization and operations management: a service dominant-logic approach. International Journal of Operations & Production Management, 34(2), 242-269. Retrieved from: https://www.emeraldinsight.com/doi/abs/10.1108/IJOPM-02-2011-0053

Wuenderlich, N. V., Heinonen, K., Ostrom, A. L., Patricio, L., Sousa, R., Voss, C., & Lemmink, J. G. 2015. “Futurizing” smart service: implications for service researchers and managers. Journal of Services Marketing, 29(6/7), 442-447. Retrieved from: https://www.emeraldinsight.com/doi/abs/10.1108/JSM-01-2015-0040

Online article

Snyder, H., Witell, L., Gustafsson, A., Fombelle, P., & Kristensson, P. 2016., Identifying categories of service innovation: A review and synthesis of the literature. Journal of Business Research, 69(7), 2401-2408. Retrieved from: https://www.sciencedirect.com/science/article/abs/pii/S0148296316000229

Tan, K. 2018. Revenue Optimization of Pipelines Construction and Operation Management Based on Quantum Genetic Algorithm and Simulated Annealing Algorithm. Journal of Applied Mathematics and Physics, 6(06), 1215. Retrieved from: https://www.scirp.org/journal/PaperInformation.aspx?paperID=85271